Finance

Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.
Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.
Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.
“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”
The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

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In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.
Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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Woman holds smartphone with Meta logo in front of a displayed Facebook’s new rebrand logo Meta in this illustration picture taken October 28, 2021.
Dado Ruvic | Reuters

Check out the companies making headlines after the bell: 
Meta Platforms — Meta Platforms’ stock surged more than 17% in extended trading after reporting a beat on earnings but a miss on revenue in the first quarter. Daily active users on Facebook also beat analyst expectations.

Qualcomm — Shares of the semiconductor rose 5% after hours following a beat on the top and bottom lines in the recent quarter driven in part by Android phone chip sales. Qualcomm reported adjusted revenue of $3.21 per share on revenues of $11.16 billion. Analysts surveyed by Refinitiv expected $2.91 a share on $10.60 billion in revenue.
PayPal — Shares of PayPal gained 3.2% after reporting adjusted earnings per share that fell in line with analysts’ estimates and a beat on revenue. The company slashed revenue and earnings per share guidance for the full year and issued weak guidance for the second quarter.
Ford — The automaker’s stock rose 4% after reporting adjusted earnings per share of 38 cents on $32.1 billion in revenues in the first quarter. Analysts surveyed by Refinitiv expected earnings of 37 cents per share on $31.13 billion in revenue. Ford said its stake in electric vehicle maker Rivian pulled profits lower.  
Amgen — Amgen shares dropped 5% despite a beat on the top and bottom lines in the previous quarter after disclosing a new dispute with the IRS, seeking billions in back taxes.
Las Vegas Sands — The casino and resort company dipped about 2% in extended trading after reporting a wider-than-expected loss and weaker-than-expected profit in the previous quarter, in part due to continued Covid-19 disruptions.

Pinterest — Shares of Pinterest soared more than 11% in extended trading after reporting a beat on the top and bottom lines in the recent quarter. Monthly active users fell 9% year-over-year to 433 million.
Mattel — Mattel’s stock gained 3.3% after the toy manufacturer reported a beat on revenue and an unexpected profit in the previous quarter.
Teladoc Health — Shares of the telehealth giant sank 38% after reporting a miss on revenue and sharing disappointing revenue guidance for the second quarter.

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Most adults in the U.S. support guaranteed access to personal finance education for high school students.
Eighty-eight percent of adults surveyed by the National Endowment for Financial Education said their state should require either a semester or year long personal finance course for graduation. The survey of 1,030 adults was conducted in March.

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“Americans overwhelmingly recognize the importance of learning money skills at an early age, and this poll reinforces there is demonstrated national support for personal finance to be a part of learning in all schools,” said Billy Hensley, president and CEO of the National Endowment for Financial Education, in a Tuesday statement.
In addition, 80% of those surveyed said that they wish they had been required to take a personal finance course to graduate high school.

The survey also found older adults, higher earners and those with a postsecondary degree were far more likely than others to support mandated personal financial education or say they wished they’d had such a class in school. Non-Hispanic white respondents were also more likely to support personal finance courses than their Black and Hispanic counterparts.
“Financial education unequivocally is the foundation for acquiring and applying knowledge, though we are transparent that education alone is not enough to overcome systemic barriers,” said Hensley. “There are many foundational factors that are part of the personal finance ecosystem that work together toward achieving financial capability.”

A growing trend
The number of states that mandate a personal finance course for high schoolers has grown in recent years. In March, Florida became the largest state to require personal finance in high school, and Georgia’s governor is set to sign a similar bill into law this week.
Currently, 25% of high school students in the U.S. have guaranteed access to a personal finance course, according to a recent report from nonprofit Next Gen Personal Finance.
In addition, more states have active bills that would mandate personal finance education if passed, and some are poised to become law this year.

Such mandates at the state level are important to ensure that all students have the same access to personal finance courses. Without a law guaranteeing such classes, students of color and those in lower-income school districts are much less likely to get a solid personal finance education, the nonprofit found.
“Legislative action, state support and access to trusted resources make a massive difference in leveling equitable access for all students,” Hensley wrote in a recent blog post. “A thorough and effective state requirement ensures that all schools can offer this vital class to their students regardless of ZIP code.”
What’s next
Beyond advocating for legislation that ensures all high schoolers get personal finance classes, Hensley and Next Gen Personal Finance point out that teacher training is also an important piece of the puzzle.
Without effective professional development, it can be difficult for teachers to feel prepared to teach personal finance. That has an impact on the outcome of the classes they teach, according to Hensley.
“Quality of instruction is equally as important as access,” Hensley wrote.
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A worker inspects a Boeing 737 MAX airliner at Renton Airport adjacent to the Boeing Renton Factory in Renton, Washington on November 10, 2020.
Jason Redmond | AFP | Getty Images

Check out the companies making headlines in early morning trading.
Enphase Energy — Shares of the solar microinverter maker jumped more than 8% during premarket trading following the company’s first-quarter results. Enphase reported record revenue, and exceeded analyst expectations on the both the top and bottom line. The company said Europe will be a key growth area looking forward as Russia’s invasion of Ukraine sends power prices soaring.

Juniper Networks — The maker of networking technology saw its shares decline 6.1% after reporting first quarter earnings that came in slightly lower than analysts’ estimates. Management said on the company earnings call that ongoing supply chain challenges have resulted in extended lead times and elevated logistics and component costs.
Edwards Lifesciences — The artificial heart valve maker’s shares fell 3.6% despite reporting a revenue beat for the first quarter, as the company issued weak revenue guidance for the current quarter.
Visa — Visa’s stock surged 5.5% premarket following a beat on the top and bottom lines in the previous quarter, as it anticipates travel recovery will bring continued growth. The payments firm reported adjusted earnings per share of $1.79 on revenues of $7.19 billion. Analysts expected $1.65 adjusted earnings per share and $6.83 billion in revenue, according to Refinitiv.
Texas Instruments — Shares of Texas Instruments fell 2.9% after the tech company issued weak earnings and revenue guidance for the current quarter and said it expects reduced demand from Covid restrictions in China.
Boeing — The aircraft maker’s shares slipped by 1.3% after the company recorded weaker-than-expected earnings and revenue for the most recent quarter. Boeing also said it’s pausing production of its 777X plane and doesn’t expect deliveries to start until 2025.

Harley-Davidson — Shares of the motorcycle maker shed 1.4% after the company reported earnings for the previous quarter that were in line with analysts’ estimates, at $1.45 per share, according to Refinitiv. It’s quarterly revenue also slightly missed estimates, at $1.30 billion versus $1.31 billion.
Robinhood — The retail brokerage’s shares fell 4.5% in early trading after the company reported it will cut about 9% of its staff, citing “duplicate roles and job functions” after its expansion last year. Robinhood reported 3,800 full-time employees as of Dec. 31.
Alphabet — Shares of Google’s parent company dipped 3.5% during premarket trading after reporting a miss on the top and bottom lines in the first quarte and weak revenue from YouTube. Alphabet reported earnings per share of $24.62 per share on revenues of $68.01 billion. Analysts anticipated earnings of $25.91 on revenues of $68.11 billion, according to Refinitiv.
Microsoft — Shares of Microsoft rose 4% premarket following a beat on the top and bottom lines in the previous quarter and shared strong guidance for the current quarter. Revenue guidance for all three of the company’s business segments in the current quarter topped analysts’ expectations.
Capital One — Capital One shares lost 5.4% in early trading despite the company beating earnings and revenue estimates for its most recent quarter. The company’s results included a pre-tax impact of $192 million from gains on partnership card portfolios and lower-than-expected net interest margins.
 — CNBC’s Samantha Subin and Pippa Stevens contributed reporting

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Gibraltar published a regulatory amendment Wednesday requiring crypto firms to respect the integrity of markets in which they operate.
Despite its small size, the overseas British territory has a track record of developing rules for the crypto market.
Some fairly large names have set up shop in Gibraltar and obtained licenses from local regulators, including FTX, Huobi and Bullish.

The overseas British territory wants to become a global hub for crypto firms.
Geography Photos | Universal Images Group | Getty Images

Gibraltar has unveiled new regulations for the cryptocurrency industry, taking aim at potential market manipulation and insider trading in the fast-evolving space.
The overseas British territory, located on the southern tip of Spain, published an amendment to existing regulations Wednesday requiring firms dealing in bitcoin and other digital currencies to respect the integrity of markets in which they operate.

In a guidance note for regulated crypto companies, the Gibraltar Financial Services Commission says firms must combat “manipulation or improper influencing of prices, liquidity or market information, or any other behaviour which is inimical to market integrity.”
“We were the first jurisdiction in 2018 to launch the legal and regulatory framework, and we’re now the first jurisdiction to launch a framework for market integrity,” Albert Isola, Gibraltar’s minister for digital and financial services, told CNBC.
“The more there is around the world in terms of international standards for this space, the more trust, the more usage, and the more adoption we will have around the world,” he added.

Gibraltar’s big blockchain ambitions

While perhaps better known as a seaport and popular vacation spot, Gibraltar is a hub for a number of other industries, including financial services and gambling. Its latest move forms part of an ongoing bid to lead the way in regulation of the digital currency industry.
Despite its small size, Gibraltar has a track record of developing rules for the crypto market. The region, which borders Spain but is under British control, first introduced a licensing regime for blockchain firms back in 2018.

Some fairly large names have set up shop in Gibraltar and obtained licenses from local regulators, including FTX, Huobi and Bullish, which is backed by PayPal co-founder Peter Thiel.
Executives from Binance, the world’s biggest crypto exchange, also visited Gibraltar “some months back,” but does not have a license, Isola said. The company is seeking to become a friend rather than foe to regulators after facing crackdowns in numerous countries last year.
The Gibraltar Stock Exchange recently agreed to be acquired by Valereum, a blockchain firm, in a bid to become the world’s first regulated bourse for share and crypto trading. It’s an aim Switzerland’s SIX Swiss Exchange is also seeking to achieve with the creation of an exchange for trading blockchain-based securities.
The latest rules arrive as various major world economies, including the U.S. and U.K., are now introducing new rules to bring crypto into the regulatory fold.
“I think it’s a sign that more and more jurisdictions are recognizing the need to do it,” Isola said. “And the need to do it is because there’s more and more adoption.”
However, Isola insisted Gibraltar is “not doing this to market ourselves,” adding: “We want a very small but quality number of firms within our jurisdiction.”

Transparency

Gibraltar has previously been criticized for being a “tax haven.” Several major U.K. gambling firms, including Entain and 888, set up shop in the rocky peninsula, in part due to its favorable taxation regime. More recently, however, Gibraltar has sought to distance itself from such a reputation.
The region is “fully compliant with all transparency and exchange of information standards applicable in the U.K.,” Isola said, adding this was at odds with descriptions of Gibraltar as a tax haven. Such transparency standards also apply to crypto, Isola added, meaning “the bar to entry is high.”
Spain last year agreed to take Gibraltar off its list of tax havens after coming to a tax cooperation deal with the U.K. The issue has been a sticking point in London’s negotiations with Madrid following Britain’s withdrawal from the EU.

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The Chinese yuan has tumbled by about 3% this month as the U.S. dollar strengthened, according to Wind Information.
On Monday evening, the PBOC announced it would cut the reserve requirement ratio on foreign exchange deposits by 1 percentage point to 8%, effective May 15.
“This move serves as a strong policy signal [the] PBOC is getting uncomfortable with the rapid depreciation of the currency,” Goldman Sachs analyst Maggie Wei and a team said in a report Monday.
On Wednesday, the PBOC set the yuan midpoint at 6.5598 versus the dollar, the weakest fix since April 2021, according to FactSet data.

The Chinese yuan has weakened sharply against the U.S. dollar in the last several weeks as the greenback strengthens and investors worry about China’s economic growth.
Fotoholica Press | Lightrocket | Getty Images

BEIJING — The Chinese yuan strengthened slightly against the U.S. dollar on Wednesday, reversing a sharp weakening trend after the People’s Bank of China signaled support for its currency.
The yuan has tumbled by about 3% this month as the U.S. dollar strengthened, according to Wind Information. Prolonged Covid controls and worries about Chinese economic growth have also weakened sentiment on the yuan.

On Monday, the PBOC announced it would cut the deposits by 1 percentage point to 8%, effective May 15. The move reduces the amount of foreign currency that banks need to hold, theoretically reducing the amount of weakening pressure on the yuan.
“This move serves as a strong policy signal [the] PBOC is getting uncomfortable with the rapid depreciation of the currency,” Goldman Sachs analyst Maggie Wei and a team said in a report Monday.
The analysts pointed out that last year, the Chinese central bank increased the same foreign currency reserve ratio twice to slow rapid strengthening in the yuan.

Uncertainties are still high with Shanghai facing protracted lockdown and new local Covid cases rising in Beijing.

Goldman Sachs analysts

“Looking forward, we expect this RRR cut to slow down CNY depreciation in the near term, though it would also depend on the broad USD path and overall sentiment toward Chinese growth,” the analysts said. “Uncertainties are still high with Shanghai facing protracted lockdown and new local Covid cases rising in Beijing.”
On Wednesday, the PBOC set the yuan midpoint at 6.5598 versus the dollar, the weakest fix since April 2021, according to FactSet data.

The U.S. dollar has strengthened since the Federal Reserve embarked on a cycle of monetary policy tightening and interest rates hikes. The U.S. 10-year Treasury yield has climbed to over three-year highs, erasing a premium the Chinese 10-year government bond yield once held.
The Fed-related market moves have made U.S. dollar-denominated assets relatively attractive to investors, while there’s general unease about the stance of economic policy in China, Schelling Xie, senior analyst at Stansberry China, said Tuesday. He expects the yuan to be on a weakening trajectory, but said the pace will likely slow.
The Chinese yuan is traded onshore — on the mainland — and offshore, primarily in Hong Kong. The yuan can trade within a 2% range above or below a midpoint set daily by the PBOC based on recent market action.
The offshore-traded yuan topped a psychologically key level of 6.60 yuan versus the dollar late Monday —the weakest since the fall of 2020, according to Wind data.

As of Wednesday afternoon, the offshore yuan held slightly stronger, near 6.58 versus the greenback. The onshore yuan was near 6.55 yuan versus the U.S. dollar.
Morgan Stanley economists expect the onshore yuan to trade near 6.48 against the U.S. dollar by the end of June.
“Overall, we believe that the PBOC would tolerate some orderly weakness in CNY, as long as it is driven by the fundamentals,” the bank’s emerging markets strategists said in a report Monday. “But USD/CNY could overshoot [the target] in the short term given the market volatility.”

Weak market sentiment

Mainland China’s primary Shanghai and Shenzhen stock indexes plunged Monday in their worst day since Feb. 3, 2020 — in the early days of the pandemic’s initial shock.
The capital city of Beijing began mass testing in the main business district on Monday, and ordered people in a smaller hard-hit area to stay home.
Shanghai, China’s largest city, has remained under prolonged lockdown for about a month with no clear end date in sight.
Despite a better-than-expected first quarter GDP report last week, several investment banks cut their forecast for China’s full-year GDP in light of the latest virus outbreaks and Covid controls.

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Policymakers have expressed support for growth in recent weeks, but markets remained more pessimistic.
“China’s policy response has been mild and geared towards fiscal front-loading,” Citi analysts said in a report late last week. “The authorities are clearly not resorting to old pump-priming ways of unleashing indiscriminate leverage to stimulate the economy.”
Separate from the forex deposit reserve cut, the central bank also cut the overall reserve requirement ratio — the amount of cash banks need to hold – on Monday. But the 25 basis point reduction was below many analysts’ expectations.
Premier Li Keqiang said Monday at a meeting of the State Council, the top executive body, that the government must attach great importance to the economic impact from unexpected domestic and foreign situations.
The PBOC said Tuesday it was aware of recent financial market volatility and would increase support for the economy with prudent monetary policy. But the announcement did not boost market sentiment much.
Mainland China stocks were higher on Wednesday, after a volatile day of trade a day earlier, which saw the main indexes close lower.

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AMERICANS HAVE much to like and much to dislike about the economy these days. Thanks to a red-hot labour market, it is unusually easy both to find work and negotiate a pay increase. At the same time, rising prices have taken a bite out of their earnings once adjusted for inflation. To get a handle on how people perceive these opposing trends, analysts can look at surveys that measure consumers’ sentiment about the economy. There is, however, a problem at the moment. Like the contradictory trends, the two main surveys are presenting different pictures.The first is a survey of consumers by the University of Michigan. Started in 1946, it is respected as a leading indicator of whether Americans are planning to spend money or tighten their belts. As such, it is looking grim. The preliminary reading for April was near its lowest point in more than a decade. Crucially, the index is 26% lower than its level a year earlier. Falls this sharp are often associated with recessions.The other survey is the Conference Board’s gauge of consumer confidence. Established in 1967, it is an equally respected snapshot of the American consumer. And it is markedly more upbeat. A sub-index measuring what consumers think about the present situation is near its highest level since the start of the pandemic, though a separate sub-index measuring their expectations is far more subdued.The divergence between the two surveys can largely be explained by their different focuses. Both consist of five questions but of a very different kind. Two of the questions in the Michigan survey ask respondents about their personal finances and one asks whether they think it a good time to make a big household purchase, such as a television. These questions are likely to pick up current concerns about inflation. The Michigan survey asks nothing about personal job prospects. By contrast, two of the five questions in the Conference Board survey are specifically about employment conditions. Its survey is, in other words, calibrated to pick up the current optimism about the labour market.Unfortunately for the American economy, the rosier Conference Board survey does not simply cancel out the gloomier Michigan alternative. Such a big divergence is itself a signal. Economists at Deutsche Bank say that compared with the Michigan survey, the Conference Board measure tends to be dominated by lagging indicators that perform well late in the cycle, making the spread between the current-conditions gauge in the two surveys their favourite indicator of cyclical consumer sentiment. It is flashing red today, with the gap close to its widest in more than half a century. At such a level, it signals that the probability of a recession is around 50% over the next year—roughly twice as high as many economists currently estimate. Whatever the true figure is, it seems clear that consumers are feeling a pinch from inflation and are increasingly anxious about the near future, despite benefiting from a strong jobs market today. Economists look at many other leading indicators beyond surveys of consumers, of course. Financial conditions, particularly the shrinking gap between yields on long-dated Treasuries and shorter-term bonds, are another portent of slower growth. Orders for durable goods, by contrast, point to resilience. Ultimately, all these indicators confirm what is all too evident from historical precedents for such a hot economy: that the Fed will need ample skill and good fortune if it is to tame price pressures without inducing a recession. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

NOT LONG ago it seemed that the game of energy poker played by Europe and Russia, though dangerous, was under control. Oil and gas was one of the few sectors Europe had not targeted with sanctions. Russia had kept supplies flowing. Yes, Europe was mulling a ban on energy imports, and Russia demanded in late March that “unfriendly” countries pay for their next gas deliveries in roubles (rather than euros or dollars), or be cut off. But each side thought the other lacked the guts to go all in. After all, Europe imports 40% of its gas from Russia, which in turn makes €400m ($422m) a day from its sales.On April 27th, however, Russia upped the ante. Gazprom, a state-owned energy giant, stopped sending gas to Bulgaria and Poland after they missed the deadlines that Russia had set for paying in roubles. The EU is scrambling to respond; European gas prices jumped by a fifth on the news (though they have since fallen a little).The immediate effect of Russia’s latest move, which the EU has previously described as being a breach of contract, is limited in scope. Poland’s imports, of 10 billion cubic metres (bcm) a year, and Bulgaria’s, of 3 bcm, together account for just 8% of total EU imports (see chart). Poland’s contract with Russia was due to expire in December anyway, so the revenue Russia loses from breaching it is small. And although Bulgaria and Poland both relied on Russia for most of their gas imports, they may be able to cope without, says Xi Nan of Rystad Energy, a consultancy. Poland should start receiving gas from Norway in October. Nearby regasification terminals could help it import more liquefied natural gas (LNG). Bulgaria is due to start importing Azeri gas via Greece later this year.Exactly who might be cut off next is not clear. Russia’s deadlines for paying in roubles partly reflect the details of contracts that are not public. But sources canvassed by The Economist think they will fall due in May. The stakes are high. It is not that Europe needs the gas now: as temperatures rise, consumption is ebbing. But the bloc’s stocks are only at 33% of storage capacity. The European Commission has urged member states to ensure that their facilities are 80% full by November, implying a spike in demand to come.Still, if Russia were to cut off big importers, it would deprive itself of some of the cash it needs to fund a costly and protracted war. So who will fold first? Most European buyers have already ruled out paying directly in roubles. But Moscow is offering a compromise. Importers would open two accounts with Gazprombank (which is not under sanctions). They would pay euros into the first one, ask the bank to convert the sum into roubles and then deposit the money into the second account, which would be wired to Gazprom.Many European countries dislike the plan, which would look as though they were giving in to Russian bullying and risks creating legal headaches. They will fall into three groups. One, which includes Belgium, Britain and Spain, imports little or no gas directly from Russia, and may refuse to compromise. Another group includes big buyers such as Germany and Italy, which will struggle to replace imports quickly; they may take the deal. A third set of waverers includes countries that are only partially dependent on Russia, and may also have contracts that are soon to expire.Even this scenario would create uncertainty: one country being cut off could have knock-on effects on others, for instance if gas transits through it to other places. Nor is it clear who will take the Russian compromise, or whether Russia might eventually turn the taps off anyway.If Germany, say, were cut off, gas markets would go haywire. European gas prices are already six times higher than they were a year ago. They would soar to new highs, luring more LNG from the rest of the world and causing prices elsewhere to rise in turn. Jack Sharples of the Oxford Institute for Energy Studies, a think-tank, reckons a full shutdown of Russian gas to Europe may well cause a global recession. Russia’s game of poker is getting scarier—and those losing their shirts may well include bystanders, too. Read more of our recent coverage of the Ukraine crisis More